My interview on TRT about Arianna Huffington stepping down from the Huffington Post

TRT World in Turkey interviewed me about the legacy of Arrianna Huffington as she stepped down as editor-in-chief from the ground-breaking site that bears her name. I will count myself as one of the sceptics when the site was launched, but I was happy to have been proven wrong.

The Huffington Post did create a new model for content in the digital era. On the plus side, it is good to see something that has worked, but on the downside, I see that model as creating as much content as possible for as cheaply as possible, which negatively impacts those who try to make a living from their creative efforts. It’s alumni also have made their mark, especially Jonah Peretti of Buzzfeed.

When I was asked why she stepped down, I alluded to talk about her influence being diluted after Verizon bought Yahoo, which had bought the Huffington Post. But I also see another reason. In 2016, general news and comment sites like the Huffington Post are a lot more difficult to build into a successful media company, but the focused sites like the health site that she will now focus on are seeing much greater success.

Advertising innovation is key to digital transformation at news organisations

When I heard that Canada’s La Presse had spent three years and $40m building its iPad app, my jaw dropped. It is one of the most expensive content development projects I have heard of, and my personal view is that such exorbitant development costs don’t make sense in the digital era. Of course, then I heard that La Presse wasn’t charging for its app or for the content, and I really couldn’t believe that this was a sane strategy.

I was not alone. Steve Faguy, a freelance journalist in Montreal, had much the same thoughts. However, Faguy landed an interview with Guy Crevier, the publisher of La Presse, about the project, and Crevier says that there is a method to their madness, a method which will very soon be tested.

Crevier says that he is very sceptical about the success of paid content strategies and believes that only a few large US and European papers with a vast offering of exclusive content, especially business content, will make paid content strategies work. Faguy quotes Crevier as comparing digital paid content to cancer treatments that merely delay the inevitable. This has led many newspapers to cut staff, which leads to a downward spiral of lower quality and lower readership.

Crevier also puts the $40m development costs in context:

“How much do you think it would cost me tomorrow morning to replace La Presse’s printing presses? It would cost me between $150 million and $200 million. And when I build a plant to print La Presse, I’m limited to 250,000 to 300,000 (copies) maximum. What does this money bring in future obligations? It brings me expenses of $100 million a year in paper, ink, trucks.”

Ok, that’s all fair enough for $40m is far cheaper than $300m. But how will the app generate enough revenue to pay for a staff of 200-plus journalists if the app and content are both free? The answer is premium ads. The app was designed to include special ad slots that La Presse hope they will be able to charge $16,000 for. In Faguy’s original critique of La Presse’s strategy, he highlighted a Radio Canada report that points out that this is much higher than other digital advertising in the Canadian market, and that the app doesn’t use standard digital ad formats so advertisers will need to do custom work to advertise in the app.

Raju Narisetti, Senior Vice President and Deputy Head of Strategy for the new News Corp, sounded a sceptical note on Twitter.

It is a bet-the-farm strategy, and one that requires that the app be a runaway success. I have to applaud La Presse in putting some thought and innovative effort into their future ad strategy. But will the audience be big enough and engagement be high enough to entice advertisers to pay the premium? We will have to see, but it will be a fascinating experiment.

La Presse’s experiment is just one of many now being run by different organisations, and this innovation, whether it is Buzzfeed’s native advertising play or Quartz’s novel in-stream advertising, is not only a good thing but an essential thing for the industry. Frédéric Filloux has an in-depth look at Quartz’s business/advertising model: it’s novel approach is bolstered by being in The Atlantic stable of print and digital publications, but the site has been able to attract very high value advertising. Filloux writes:

A year ago, the site started with four brands: Chevron, Boeing, Credit Suisse and Cadillac. Today, Quartz has more twenty advertisers from the same league. Unlike other multi-page websites, its one-scroll structure not only proposes a single format, but also re-creates scarcity.

The limited number of ad slots may create a cap for growth, but as he points out, Quartz is powering towards its break-even point ahead of schedule.

I’m a journalist, and I am thrilled to see a level of commercial innovation that we haven’t seen since the late 90s. I don’t think it will address all of the issues that journalism faces in the attention economy, but at least we’re starting to fight the good fight.

Unbalanced coverage in the US balanced budget debate

I almost never, ever write about politics. I steer well clear of it. However, I’m going to risk it because I’m not sleeping well right now because it looks like my country, the once United States of America, is about to drive itself off a cliff.

When I say the coverage of the almost entirely self-inflicted US debt crisis is unbalanced, I don’t mean lacking objectivity or prejudiced, I mean insane. Balanced coverage would quote Tea Party darling Michele Bachman saying that there isn’t anything to worry about and Tea Party darling Jim Demint saying this is “manufactured crisis” on one side and then queuing up economist after economist, the ratings agencies, major financial companies, Fed chief Ben Bernanke, Treasury Secretary Tim Geithner and just about every other credible economic and business voice on the other side. As Dana Milbank of the Washington Post wrote in referring to 20 Tea Party Republicans as the Default Caucus:

So far, the Default Caucus is disregarding the advice of the Wall Street Journal editorial boardwarnings from Standard & Poor’s, the record of Ronald Reagan and even the permission of Grover Norquist, the conservative loyalty enforcer who said that ending the Bush-era tax cuts would not violate lawmakers’ anti-tax pledges.

Not to quote too liberally from Milbank’s column, but this is the problem:

Pew Research Center poll last week found that 53 percent of Republicans, and 65 percent of Tea Party faithful, believe that the Aug. 2 default deadline can be ignored without major problems.

A responsible press would be driving home the point to all who cared to listen that this will have consequences. Dire ones. It’s not just another government shutdown like 1994. No, even if a default doesn’t happen immediately because the US can’t meet its obligations, the ratings agencies will downgrade the US debt rating almost immediately. That may be abstract to most Americans, but it will have real and immediate consequences. Doing nothing is not an option, and it may already be too late to convince the ratings agencies that the US government isn’t broken.

I couldn’t agree more with US National Public Radio’s On the Media, when they criticised the US media for covering the political drama while almost entirely missing the point. They interviewed Rick Newman of US News and World Republic, not exactly a liberal publication, who said:

the Republicans are digging in their heels and saying no tax increases. And President Obama has basically said he will accept something that is about 75 percent spending cuts and 25 percent tax increases. That is a moderate position, based on the whole range of recommendations we’ve seen, but the media is struggling with how to re – relate to that. So they have to say Obama, on one hand, and these Republicans, on the other hand. And that’s where I think people get pretty confused.

As an American journalist, I was trained in objectivity. It is not a violation of objectivity to accurately portray what is at stake here. With a downgrade, borrowing costs will be higher. Overnight, the cost of serving the US debt will rise because it will be more expensive our basket-case government to borrow money. Recovery? Buh bye! Some economists estimate that for every 50 basis points (half a point of interest) rise in borrowing costs, you can kiss 600,000 US jobs goodbye. (A post by Ezra Klein at the Washington which will be quickly dismissed by conservatives as from a liberal rag.) Interest rates will rise making borrowing for average Americans higher. Americans, who like me, want to buy a house, will find it harder to finance. The already fragile housing market will take another knock. These are on the mild end of predictions. It goes rapidly downhill from there.

A few years ago, I chaired a panel about journalism and the financial crisis. A good friend, Kate Mackenzie from the FT, expressed some justified frustration when time and again the audience asked why journalists didn’t warn them of the coming debt-fuelled financial crisis. The general press mostly missed it apart from a few. However, Kate was right in pointing out that the business press had been covering this for at least two to three years before the crisis hit. I remember reading a Bloomberg magazine cover story titled Toxic Debt, all about CDOs and how they hid ridiculously risky assets including sub-prime mortgages. I read that in the summer of 2007, and I came home telling Suw that this could be 1929 all over again. It nearly was, and now, this crisis is entirely created by childish leaders who want it all and won’t compromise. As for the anti-compromise brigade, I hold Huffington Post liberals almost almost as responsible as the Tea Partiers. Both have made compromise a dirty word in Washington. Compromise is a sign of maturity. You never get everything you want. Most of us learned that on the playground as children.

With this balanced budget debt debacle, we can see this one coming. We can do something about it. We will have no one to blame but ourselves.

As a journalist, I’m paid to pay attention, and I’ve been paying attention from the start. This is serious. The clock is ticking on the US. There wasn’t any time to waste a month ago, and the political posturing has to stop. The Republicans are now accusing Barack Obama of playing politics and looking to his re-election. As if they aren’t. As if the half of the Republican Party queuing up to take his job isn’t looking to 2012. Don’t be silly.

The US is about to face a debt downgrade and possibly a default. It could take us back to the stomach-churning autumn of 2008 when the global economy hung in the balance. This is serious, and it needs some maturity and some compromise. I’d really like to come home, but I won’t be able to move back to the US if the Tea Party wrecks the economy. Man up both Republicans and Democrats. Too much is at stake to pander to those who won’t accept reality. My fellow Americans, get on that phone now. Call your Senator. Call your member of Congress. Your future, our future is at stake.

Innovation: Focusing on finding “The Next Big Thing” leads to performance pressure

This cross-posted from The Media Briefing, a new site in the UK for media professionals. ?I like the cut of their jib. They are not only creating content, but they are also adding value to their content using semantic technologies to make it easier for busy professionals content relevant to them.

You want innovation? You can’t handle innovation.

Seriously though, once they’re established, most companies are geared toward stability, not disrupting their own operations. Newspaper and magazine companies are no different.

And print media had no real impetus to change radically until recently. Newspapers and magazines took the challenge from television and radio in its stride – but it took the combined impact of multi-channel television, video games and the internet to challenge print media’s dominance. But if you thought the last five years were disruptive, brace yourself for the next five.

The change in media economics has been a shift from scarcity – with few sources of information and entertainment – to more content choices than the human brain can possibly process. In this super-saturated media market, it’s about to get even more crowded.

AOL and Yahoo have decided to focus their strategies on content, although Yahoo in particular has tried this before and failed. Even if AOL fails, its efforts will put additional pressure on print media. AOL launched a local news service, Patch, in the US: Warren Webster, Patch’s president, recently told Ken Doctor in the that he can match the content production of a like-sized newspaper for 4.1 percent of the cost. As Ken wrote:

“Patch can produce the same volume of content… for 1/25 the cost of the old Big Iron newspaper company, given its centralized technology and finance and zero investment in presses and local office space. (Staffers work out of their homes.)”

Demand Media is already operating in the UK, bringing its model of consistent work for freelancers at ridiculously low rates. They march to the beat of Google‘s drum, commissioning content based on popular search terms. The content may be easy to parody, but Demand is preparing for what many are predicting will be a US$1.5bn floatation on the market.

So how will you turn staid institutions into nimble players in the new media environment?

One strategy that won’t work is locking a bunch of smart people in a room to come up with The Next Big Thing. The Economist, as successful it is, tried to do that with Project Red Stripe. It didn’t work, leading to a kind of performance anxiety and creative paralysis.

The industry has spent a lot of time hiring innovation officers and investing innovation in a few positions. In the not-so-distant past, the people in these positions have had no budget, no staff, an ill-defined role and, therefore, little impact. Clay Shirky in his seminal blog post, Newspapers: Thinking the Unthinkable, said that these people saw what was happening and simply described it to their colleagues. Clay says:

When reality is labelled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en bloc.

Innovation is about creating a culture of constant of improvement. If you could do one thing that would save every single journalist in your organisation ten minutes on every story – it might not be sexy – but these cost savings are necessary to compete with someone who does what you do for a fraction of the cost.

Steve Yelvington, a digital content pioneer in the US, worked on the NewspaperNext Project, and he’s been working on digital projects long before most media execs even knew what a computer was.

The NewspaperNext project looked at disruptive innovationthrough the lens of Clayton Christensen, author of The Innovator’s Dilemma. The basic question was this: “How and why (did) simple, low-end, inadequate, ‘junk’ products and services so often topple the big guy?”

These insurgents do it by starting with a product that is “good enough” and then constantly improve it. Insurgents start out “beneath” the incumbents, but then move upmarket. Recent hires by the Huffington Post, Yahoo and The Daily Beast show how pure digital companies are now starting to lure top talent away from the once imperious names of US journalism.

Wracking your brains for the next Big Thing is not the answer. The rules of the media market have already changed and it’s time to listen to the people you once thought were barking mad. Your survival might just depend on it.

Everything you need to know about the internet | Technology | The Observer

Kevin: John Naughton has an excellent meditation about the internet and the pervasive search for easy answers. We're living through a revolution. Get used to it. As he writes, disruption is a feature not a bug. "By implementing these twin protocols, Vint Cerf and Robert Kahn created what was essentially a global machine for springing surprises." It's an excellent piece that looks at a number of the disruptive trends online such as how to deal with information abundance, which upends traditional economics that attempts to deal with the allocation of scrace resources.

New Statesman – Welcome to the fifth estate

Kevin: Laurie Penny writes in the New Statesmen about the continued prejudice shown by mainstream commentators towards political bloggers in the UK: "Cosy members of the established commentariat eye bloggers suspiciously, as if beneath our funny clothes and unruly hair we might actually be strapped with information bombs ready to explode their cultural paradigms and destroy their livelihoods.

This sort of prejudice is deeply anodyne.

Bloggers aren't out to take away the jobs of highly-paid columnists: we're more ambitious than that. We're out for a complete revolution in the way media and politics are done."